Monday, August 22, 2011

Right Now, pt. 3 [UPDATED]

It appears that the mainstream media are finally - finally - realizing that, as I've said for the last month, the President's repeated calls on Congress to move pending FTAs with Korea, Colombia and Panama "right now" are more than a tad misleading. On Saturday, the WSJ editorial board joined me in openly questioning the President's claims:

President Obama says he wants to get the U.S. economy growing, so here's a tip that may help: In order for Congress to ratify free-trade agreements, the White House must first send the signed deals to the other end of Pennsylvania Avenue.

On his three-state tour in the Midwest this week, Mr. Obama repeatedly told audiences that the Korea, Colombia and Panama free-trade deals would all be law by now if not for an obstructionist Congress. Passing the deals is something Congress "could do right now," he said.

Except that's not true. Congress can't pass the agreements "right now" because it doesn't have them. They are still sitting on the President's desk. Seriously.

When finally confronted with this obvious-yet-unreported hole in the President's arguments, White House spokesman Josh Earnest was, well, less-than-prepared to explain:

If you are surprised to learn this, you are not alone. White House deputy press secretary Josh Earnest only learned the news on Friday during a press conference. Asked why the FTAs haven't been sent, he responded, "We have not sent them over?"

That was followed by what might be called an awkward moment. "I will say this—I mean, there has been an active dialogue that's been underway between the United States trade representative, other members of the Administration, with the appropriate Congressional leaders in the committees of jurisdiction. We are in a place where we have seen Republicans advocating for passing these free trade agreements for quite some time," Mr. Earnest explained. He also pointed out that "these three trade agreements combined would create or support about 70,000 jobs here in the U.S."

A reporter persisted and asked, "Well, when are you going to send them over?" "But I can tell you that there's no reason—I mean, there's agreement here about the benefits of these trade agreements getting through the Congress, both here at the White House and Democrats and Republicans on Capitol Hill. Mr. Earnest referred reporters to "Congress or the USTR on the legislative mechanics of this," adding that "there is bipartisan agreement on this and it's something that we should move on really quick."

You have got to be kidding me. The transcript of Mr. Earnest's revealing comments is available here. Given Earnest's total ignorance on the process of implementing the FTAs, it's pretty clear that the White House doesn't have a concrete plan on how it will advance and finalize the agreements once Congress returns from recess.

In Mr. Earnest's defense, maybe that's because members of the President's own party are openly bragging about how they're going to submarine the trade agreements:

Sen. Sherrod Brown (D-Ohio) is strongly considering offering his China currency bill, co-sponsored by Republican Sen. Olympia Snowe (Maine), as an amendment to a standalone worker-retraining measure that is expected to begin movement through the House and Senate next month, a Senate aide told The Hill.

Brown would offer his currency legislation -- which would direct the Commerce Department to treat currency undervaluation as a prohibited export subsidy -- to a streamlined version of a Trade Adjustment Assistance (TAA) bill worked out in late June by the White House, House Ways and Means Chairman Dave Camp (R-Mich.) and Senate Finance Chairman Max Baucus (D-Mont.).

“Extending Trade Adjustment Assistance is an important step to respond to job loss caused by foreign competition. But addressing unfair trade practices like Chinese currency manipulation can prevent job loss by ensuring a level playing field for American manufacturers facing a flood of cheap Chinese imports,” Brown said in a recent statement. “With up to 2 million jobs that may be hanging in the balance, Congress must take action immediately.”

The Senate Minority Leader Mitch McConnell (R-Ky.) and Senate Majority Leader Harry Reid (D-Nev.) have agreed to allow amendments to the TAA bill and require a 60-vote threshold for the adoption of amendments, making it more challenging for the upper chamber to change the measure.

Adoption of the Brown-Snowe amendment would further complicate passage of TAA and likely draw out completion of the trade deals with Colombia, Korea and Panama, as the White House hasn't agreed to accept any other changes....

Earlier this week, in a speech to the United Steelworkers, House Minority Leader Nancy Pelosi (D-Calif.) said China's currency manipulation must be addressed before sending the trade deals up to Capitol Hill....

Other lawmakers and U.S businesses have expressed concern about the currency issue, which they say China deliberately undervalues to benefit Chinese exporters along with the lack of regulatory transparency, policies that favor Chinese domestic domestic businesses and a lack of protection for U.S. intellectual property....

Earlier this month, the White House and congressional leaders reached a general agreement to pass TAA, an Obama administration demand, along with the trade deals, although there are still several process issues that remain to be worked out.

One avenue is for the House to approve a Generalized System of Preferences (GSP) bill, which expired in December, followed by Senate approval of GSP with the attachment of Trade Adjustment Assistance (TAA), a program that helps workers hurt by trade deals.

That amended bill would return to the House and then Obama administration would submit the three pending trade deals with Colombia, Korea and Panama.

The House would then hold four separate votes, one each on the trade deals and another on the TAA-GSP measure. The trade package also could include the Andean Trade Preferences Act (ATPA), which may wind up in the Colombia accord.

Then the four bills would go to the Senate for final approval.

Given the small number of legislative days in September, this process would likely not be concluded until October.

Clearly, congressional passage of the FTAs will require an airtight plan and strong White House leadership in order parry House and Senate Democrats' attempts to attach a China currency "poison pill" (or anything else) to the TAA, GSP or FTA legislation. Mr. Earnest's cluelessness on the procedural basics surrounding the FTAs hardly inspires confidence that the President's team has all of these important details worked out. And unfortunately for US exporters and consumers, the White House is quickly running out of time - Congress returns from recess on September 6.

Hey, remember earlier this month how the FTAs were as good as finished? Yeah, me neither.

UPDATE: The Washington Post's Glenn Kessler joins the WSJ in finally noticing that the President's "right now" schtick is misleading, giving his statements "One Pinocchio" in his FactChecker column:

The administration has clearly played a balancing act, trying to attract Democratic support without losing significant Republican backing. We’re not going to judge who is more right on the history leading up to this point, but we do think it is a highly selective recounting of that history for the president to suggest GOP lawmakers are blocking the deal because they are putting party before country. There is actually strong support for these agreements within the Republican Party — just like there is strong support for trade adjustment legislation among Democrats.

There may be a philosophical dispute over aid for companies harmed by free trade, but the administration in the end is responsible for making passage of TAA a condition for submitting the trade deals. Moreover, Obama leaves the distinct impression that Congress is sitting on the bills, when in fact they have not yet been officially submitted for consideration.

Kessler doesn't quite understand that the White House is arguing over the passage of a $1B TAA expansion, not the old TAA program, and he's pretty kind to Obama for giving him only one "pinocchio" for his repeated, and clearly erroneous, claims that GOP obstructionism is holding up the trade agreements. But it's still nice to see that even sympathetic media are opening their eyes to the administration's rampant FTA distortions.